LANCASTER, Pa., Oct. 15, 2024 /PRNewswire/ -- Fulton Financial Corporation (NASDAQ:FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $60.6 million, or $0.33 per diluted share, for the third quarter of 2024, a decrease of $31.8 million, or $0.19 per share, in comparison to the second quarter of 2024. Operating net income available to common shareholders for the three months ended September 30, 2024 was $91.3 million, or $0.50 per diluted share(1), an increase of $8.8 million, or $0.03 per share, in comparison to the second quarter of 2024.
"We are excited about the progress we made on key strategic initiatives and pleased to see that this work has generated record operating earnings this quarter," said Curtis J. Myers, Chairman and CEO of Fulton. "We continue to see strong operating revenue growth, improvement in operating efficiency and profitability, combined with solid organic capital generation."
Financial Highlights
Third quarter of 2024 operating results of $0.50 per diluted share represented an all-time high for Fulton and was impacted by the following items:
Solid net interest margin of 3.49%, an increase of six basis points compared to the prior quarter.
Excluding brokered deposits, customer deposits increased $745.0 million compared to the prior quarter.
Common equity tier 1 capital increased to 10.5%, compared to 10.3% in the prior quarter.
Tangible shareholders' equity per common share increased $0.59, or 4.7%, to $13.02 compared to the prior quarter.
Acquisition-related(2) expenses of $14.2 million.
FultonFirst implementation and asset disposal costs of $9.4 million.
The following items highlight notable changes in the components of net income in the third quarter of 2024 compared to the second quarter of 2024:
Net interest income totaled $258.0 million, an increase of $16.3 million, which was largely due to the full-quarter impact of the Acquisition and an increase in on-balance sheet liquidity.
Non-interest income before investment securities gains (losses) was $59.7 million compared to $113.3 million in the second quarter of 2024. The decrease was primarily due to a $55.1 million change in the gain on acquisition (net of tax) with a $7.7 million reduction recorded in the third quarter of 2024.
Non-interest expense was $226.1 million compared to $219.8 million in the second quarter of 2024, excluding the $20.3 million gain on the sale-leaseback transaction, reflected in other expense in the second quarter of 2024. The increase was largely due to an $8.2 million increase in salaries and benefits expense driven by a $4.9 million increase in employee severance costs related to the FultonFirst initiative, a full-quarter impact of salaries and benefits from the Acquisition resulting in an increase of $2.7 million and a $1.7 million increase in incentive compensation expense. The increase in salaries and benefits expense was partially offset by a $1.4 million decrease in consulting costs related to the FultonFirst initiative.
Balance Sheet Summary
Net loans totaled $24.2 billion, an increase of $69.8 million compared to $24.1 billion as of June 30, 2024. The increase was largely due to increases of $203.7 million and $53.8 million in commercial mortgage loans and residential mortgage loans, respectively, partially offset by decreases of $130.8 million, $53.1 million and $40.4 million in construction loans, commercial and industrial loans and consumer loans, respectively. Excluding the impact from the day 1 Purchased Credit Deteriorated ("PCD") adjustment of $55.9 million and purchase accounting accretion of $24.9 million, net loans acquired in the Acquisition declined approximately $82.3 million since the Acquisition Date. Excluding purchase accounting accretion of $14.5 million, net loans acquired in the Acquisition declined approximately $49.2 million to $2.5 billion, compared to the second quarter of 2024.
Deposits totaled $26.2 billion, an increase of $592.5 million compared to $25.6 billion as of June 30, 2024. The increase was primarily due to increases of $374.2 million, $301.4 million and $177.1 million in time deposits, interest-bearing demand deposits and savings deposits, respectively, partially offset by decreases of $152.5 million in brokered deposits and $107.7 million in noninterest-bearing demand deposits. Deposits assumed in the Acquisition declined approximately $248.6 million since the Acquisition Date and increased approximately $108.7 million to $3.9 billion compared to the second quarter of 2024.
Provision for Credit Losses and Asset Quality
The provision for credit losses was $11.9 million in the third quarter of 2024 compared to $32.1 million in the second quarter of 2024. The decrease was primarily related to the Acquisition, which included a provision for credit losses of $23.4 million for non-PCD loans in the second quarter of 2024.
Non-performing assets were $205.0 million, or 0.64% of total assets, at September 30, 2024, in comparison to $174.0 million, or 0.55% of total assets, at June 30, 2024.
Net charge-offs for the third quarter of 2024 were 0.18% of total average loans in comparison to 0.19% in the second quarter of 2024.
The allowance for credit losses attributable to net loans remained relatively unchanged and totaled $376.0 million, or 1.56% of total loans at September 30, 2024, compared to $375.9 million, or 1.56% of total loans at June 30, 2024.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
(1)
Financial measure derived by methods other than generally accepted accounting principles ("GAAP"). Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of the press release.
(2)
On April 26, 2024, the Corporation announced that its wholly owned banking subsidiary, Fulton Bank, National Association ("Fulton Bank"), acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank, doing business as Republic Bank ("Republic Bank"), from the Federal Deposit Insurance Corporation (the "FDIC"), as receiver for Republic Bank (the "Acquisition"), pursuant to the terms of the Purchase and Assumption Agreement - Whole Bank, All Deposits, effective as of April 26, 2024 (the "Acquisition Date"), among the FDIC, as receiver of Republic Bank, the FDIC and Fulton Bank.
Safe Harbor Statement
This press release may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Non-GAAP Financial Measures
The Corporation uses certain financial measures in this press release that have been derived from methods other than GAAP. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this press release.
FULTON FINANCIAL CORPORATION
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
(dollars in thousands, except per share and shares data)
Three months ended
Sep 30
Jun 30
Mar 31
Dec 31
Sep 30
2024
2024
2024
2023
2023
Ending Balances
Investment securities
$ 4,545,278
$ 4,184,027
$ 3,783,392
$ 3,666,274
$ 3,698,601
Net loans
24,176,075
24,106,297
21,444,483
21,351,094
21,177,508
Total assets
32,185,726
31,769,813
27,642,957
27,571,915
27,375,177
Deposits
26,152,144
25,559,654
21,741,950
21,537,623
21,421,589
Shareholders' equity
3,203,943
3,101,609
2,757,679
2,760,139
2,566,693
Average Balances
Investment securities
4,237,805
4,043,136
3,672,844
3,665,261
3,834,824
Net loans
24,147,801
23,345,914
21,370,033
21,255,779
21,121,277
Total assets
31,895,235
30,774,891
27,427,626
27,397,671
27,377,836
Deposits
25,778,259
24,642,954
21,378,754
21,476,548
21,357,295
Shareholders' equity
3,160,322
2,952,671
2,766,945
2,618,024
2,645,977
Income Statement
Net interest income
258,009
241,720
206,937
212,006
213,842
Provision for credit losses
11,929
32,056
10,925
9,808
9,937
Non-interest income
59,673
92,994
57,140
59,378
55,961
Non-interest expense
226,089
199,488
177,600
180,552
171,020
Income before taxes
79,664
103,170
75,552
81,024
88,846
Net income available to common shareholders
60,644
92,413
59,379
61,701
69,535
Per Share
Net income available to common shareholders (basic)
$0.33
$0.53
$0.36
$0.38
$0.42
Net income available to common shareholders (diluted)
$0.33
$0.52
$0.36
$0.37
$0.42
Operating net income available to common shareholders(1)
$0.50
$0.47
$0.40
$0.42
$0.43
Cash dividends
$0.17
$0.17
$0.17
$0.17
$0.16
Common shareholders' equity
$16.55
$16.00
$15.82
$15.67
$14.47
Common shareholders' equity (tangible)(1)
$13.02
$12.43
$12.37
$12.25
$11.05
Weighted average shares (basic)
181,905
175,305
162,706
163,975
164,566
Weighted average shares (diluted)
183,609
176,934
164,520
165,650
166,023
(1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release.
Three months ended
Sep 30
Jun 30
Mar 31
Dec 31
Sep 30
2024
2024
2024
2023
2023
Asset Quality
Net charge-offs to average loans
0.18 %
0.19 %
0.16 %
0.15 %
0.10 %
Non-performing loans to total net loans
0.84 %
0.72 %
0.73 %
0.72 %
0.67 %
Non-performing assets to total assets
0.64 %
0.55 %
0.57 %
0.56 %
0.52 %
ACL - loans(1) to total loans
1.56 %
1.56 %
1.39 %
1.37 %
1.38 %
ACL - loans(1) to non-performing loans
186 %
218 %
191 %
191 %
208 %
Profitability
Return on average assets
0.79 %
1.24 %
0.91 %
0.93 %
1.04 %
Operating return on average assets(2)
1.17 %
1.11 %
1.00 %
1.03 %
1.08 %
Return on average common shareholders' equity
8.13 %
13.47 %
9.28 %
10.09 %
11.25 %
Operating return on average common shareholders' equity (tangible)(2)
15.65 %
15.56 %
13.08 %
14.68 %
15.17 %
Net interest margin
3.49 %
3.43 %
3.32 %
3.36 %
3.40 %
Efficiency ratio(2)
59.6 %
62.6 %
63.2 %
62.0 %
61.5 %
Non-interest expense to total average assets
2.82 %
2.61 %
2.60 %
2.61 %
2.48 %
Operating non-interest expense to total average assets(2)
2.45 %
2.55 %
2.49 %
2.47 %
2.47 %
Capital Ratios(3)
Tangible common equity ratio ("TCE")(2)
7.5 %
7.3 %
7.4 %
7.4 %
6.8 %
Tier 1 leverage ratio
8.9 %
9.2 %
9.3 %
9.5 %
9.4 %
Common equity Tier 1 capital ratio
10.5 %
10.3 %
10.3 %
10.3 %
10.3 %
Tier 1 risk-based capital ratio
11.3 %
11.1 %
11.1 %
11.2 %
11.1 %
Total risk-based capital ratio
14.0 %
13.8 %
14.0 %
14.0 %
14.0 %
(1) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Net Loans" and does not include the ACL related to off-balance-sheet
("OBS") credit exposures.
(2) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release.
(3) Regulatory capital ratios as of September 30, 2024 are preliminary estimates and prior periods are actual.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
Sep 30
Jun 30
Mar 31
Dec 31
Sep 30
2024
2024
2024
2023
2023
ASSETS
Cash and due from banks
$ 296,500
$ 333,238
$ 247,581
$ 300,343
$ 304,042
Other interest-earning assets
1,287,392
1,188,341
231,389
373,772
222,781
Loans held for sale
17,678
26,822
10,624
15,158
20,368
Investment securities
4,545,278
4,184,027
3,783,392
3,666,274
3,698,601
Net loans
24,176,075
24,106,297
21,444,483
21,351,094
21,177,508
Less: ACL - loans(1)
(375,961)
(375,941)
(297,888)
(293,404)
(292,739)
Loans, net
23,800,114
23,730,356
21,146,595
21,057,690
20,884,769
Net premises and equipment
171,731
180,642
213,541
222,881
215,626
Accrued interest receivable
115,903
120,752
107,089
107,972
101,624
Goodwill and intangible assets
641,739
648,026
560,114
560,687
561,284
Other assets
1,309,391
1,357,609
1,342,632
1,267,138
1,366,082
Total Assets
$ 32,185,726
$ 31,769,813
$ 27,642,957
$ 27,571,915
$ 27,375,177
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
$ 26,152,144
$ 25,559,654
$ 21,741,950
$ 21,537,623
$ 21,421,589
Borrowings
2,052,227
2,178,597
2,296,040
2,487,526
2,370,112
Other liabilities
777,412
929,953
847,288
786,627
1,016,783
Total Liabilities
28,981,783
28,668,204
24,885,278
24,811,776
24,808,484
Shareholders' equity
3,203,943
3,101,609
2,757,679
2,760,139
2,566,693
Total Liabilities and Shareholders' Equity
$ 32,185,726
$ 31,769,813
$ 27,642,957
$ 27,571,915
$ 27,375,177
LOANS, DEPOSITS AND BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage
$ 9,493,479
$ 9,289,770
$ 8,252,117
$ 8,127,728
$ 8,106,300
Commercial and industrial
4,914,734
4,967,796
4,467,589
4,545,552
4,577,334
Real estate - residential mortgage
6,302,624
6,248,856
5,395,720
5,325,923
5,279,681
Real estate - home equity
1,144,402
1,120,878
1,040,335
1,047,184
1,045,438
Real estate - construction
1,332,954
1,463,799
1,249,199
1,239,075
1,078,263
Consumer
651,717
692,086
698,421
729,318
743,976
Leases and other loans(2)
336,165
323,112
341,102
336,314
346,516
Total Net Loans
$ 24,176,075
$ 24,106,297
$ 21,444,483
$ 21,351,094
$ 21,177,508
Deposits, by type:
Noninterest-bearing demand
$ 5,501,699
$ 5,609,383
$ 5,086,514
$ 5,314,094
$ 5,575,374
Interest-bearing demand
7,779,472
7,478,077
5,521,017
5,722,695
5,757,487
Savings
7,740,595
7,563,495
6,846,038
6,616,901
6,707,729
Total demand and savings
21,021,766
20,650,955
17,453,569
17,653,690
18,040,590
Brokered
843,473
995,975
1,152,427
1,144,692
941,059
Time
4,286,905
3,912,724
3,135,954
2,739,241
2,439,940
Total Deposits
$ 26,152,144
$ 25,559,654
$ 21,741,950
$ 21,537,623
$ 21,421,589
Borrowings, by type:
Federal funds purchased
$ —
$ —
$ —
$ 240,000
$ 544,000
Federal Home Loan Bank advances
950,000
750,000
900,000
1,100,000
730,000
Senior debt and subordinated debt
535,917
535,741
535,566
535,384
540,174
Other borrowings
566,310
892,856
860,474
612,142
555,938
Total Borrowings
$ 2,052,227
$ 2,178,597
$ 2,296,040
$ 2,487,526
$ 2,370,112
(1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures.
(2) Includes equipment lease financing, overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per share and share data)
Three months ended
Nine months ended
Sep 30
Jun 30
Mar 31
Dec 31
Sep 30
Sep 30
2024
2024
2024
2023
2023
2024
2023
Net Interest Income:
Interest income
$ 427,656
$ 400,506
$ 339,666
$ 338,134
$ 330,371
$ 1,167,828
$ 935,103
Interest expense
169,647
158,786
132,729
126,128
116,529
461,162
292,822
Net Interest Income
258,009
241,720
206,937
212,006
213,842
706,666
642,281
Provision for credit losses
11,929
32,056
10,925
9,808
9,937
54,910
44,228
Net Interest Income after Provision
246,080
209,664
196,012
202,198
203,905
651,756
598,053
Non-Interest Income:
Wealth management
21,596
20,990
20,155
19,388
19,413
62,741
56,152
Commercial banking:
Merchant and card
7,496
7,798
6,808
7,045
7,626
22,103
22,160
Cash management
7,201
6,966
6,305
6,030
5,960
20,473
17,310
Capital markets
3,311
2,585
2,341
4,258
2,960
8,236
11,396
Other commercial banking
4,281
4,061
3,375
3,447
3,176
11,716
9,514
Total commercial banking
22,289
21,410
18,829
20,780
19,722
62,528
60,380
Consumer banking:
Card
7,917
8,305
6,628
6,739
6,770
22,850
19,604
Overdraft
3,957
3,377
2,786
2,991
2,996
10,120
8,425
Other consumer banking
3,054
2,918
2,254
2,357
2,407
8,226
7,081
Total consumer banking
14,928
14,600
11,668
12,087
12,173
41,196
35,110
Mortgage banking
3,142
3,951
3,090
2,288
3,190
10,183
8,100
Gain on acquisition, net of tax
(7,706)
47,392
—
—
—
39,685
—
Other
5,425
4,933
3,398
5,587
1,463
13,756
8,539
Non-interest income before investment securities gains (losses)
59,674
113,276
57,140
60,130
55,961
230,089
168,281
Investment securities gains (losses), net
(1)
(20,282)
—
(752)
—
(20,283)
19
Total Non-Interest Income
59,673
92,994
57,140
59,378
55,961
209,806
168,300
Non-Interest Expense:
Salaries and employee benefits
118,824
110,630
95,481
97,275
96,757
324,935
280,142
Data processing and software
20,314
20,357
17,661
16,985
16,914
58,332
49,486
Net occupancy
18,999
17,793
16,149
14,647
